In recent years, IT has been one of the fastest growing industries in Cyprus. Investors are ready to invest their money in modern technology.
Income tax in this country is only 12.5 percent. The Republic of Cyprus is a member of the European Union, which gives ample opportunities for business development in Europe.
Some legal forms of companies do not require minimum capital. This is especially important for small businesses that are just starting out.
Today the IT sphere has one of the highest wages. That is why many young people are educated in IT. The labor market in IT makes it possible to staff the team with good specialists.
Relocation of IT-business to Cyprus: Reasons and Benefits
There are many situations that make you think about relocation of IT-business to a foreign country. Most often it is reduction of tax, protection of intellectual property, access to cheap loans, labor, expanding markets, desire to be in a comfortable, safe environment. One of the countries with a loyal attitude to IT business is Cyprus.
Recently, the state has been pursuing an active policy to attract representatives of the high-tech industry, which is reflected in creating quite attractive conditions for migration and operating business.
According to the Cyprus Investment Promotion Agency, 31 foreign companies have declared their desire to move their headquarters to Cyprus for the first three quarters of 2022. According to statistics, the number of applications is regularly increasing. The most frequent requests come from businessmen from Israel, Ukraine, Canada, the Russian Federation, the United States, France and the UK.
Representatives of the Invest Cyprus provide active support to entrepreneurs who have decided to move their business to the island.
Predictably, the abundance of preferences for the IT industry benefits not only business, but also Cyprus.
- Firstly, new jobs are created in the process of relocation, the formation of branches and representative offices, employing both locals and highly qualified foreign employees. This, decreases unemployment, increases domestic consumption, and decreases the social burden on the state budget. For example, the industry officially employed more than 20 thousand people last year.
- Secondly, the economy of Cyprus is growing steadily. In 2021 alone, high-tech companies added 1.8 billion euros to the country’s budget.
Government support for the IT industry
In 2019, the Government of Cyprus decided to increase funding for the technological industry. Another important thing is the launch of a special agency to attract investments.
A number of government initiatives have also been launched on the territory of Cyprus for the development of small businesses and startups.
Thanks to a number of incentive programs, the development of IT in Cyprus is now increasing. And it is very important during this period it that to carve out your niche in this business.
One of the main advantages is the relatively quick registration of the company. Also, it is not required to turn off its work in the same place, i.e. you can open a branch or representative office, or you can open an LLC itself.
Any natural or legal person can register a company in Cyprus without any permission.
- Identification of shareholders of the Company and if the shareholder is also a legal entity, provide all necessary corporate documents
- Founder's address of residence, founder's specialization, brief description of business
- Bank reference for shareholders
- Shareholder CV
The client can get a preliminary free consultation via ZOOM or Skype
List of required documents for individuals::
Local and international passport;
A copy of a utility bill indicating permanent place of residence (not more than 3 months old);
Tax ID number;
Documents confirming the size and source of income, for example: rental income, salary, dividend income, tax returns, etc
Bank accounts, KYC/AML verification documents for legal entities (companies)
Certificate confirming powers of Directors and Secretary;
Company Registered Office Certificate;
Identity card (ID) / international passport of the:
beneficial owner(s) and director(s)
- Copy of the utility bill of the beneficial owner as proof of residency;
- CV of the beneficial owner(s);
- Bank reference of the beneficial owner(s);
- Taxpayer Identification Number of the beneficial owner(s);
- Documents confirming the amount and source of funds. For example: rental income, salary, tax returns, etc
Tax residency for individuals:
- A tax resident is defined by law as a person who satisfies either the 183-day rule or the 60-day rule.
- 183-day rule
Tax resident is defined by law as a person staying in Cyprus for more than 183 days in a calendar year.
- 60-day rule
applies to persons who:
- (I) do not reside in any other state for a period exceeding 183 days in the aggregate, and
- (II) are not tax residents in any other state;
- (III) live in Cyprus for at least 60 days and
- (IV) have a permanent residential property in Cyprus, which they either own or rent, and
- (V) do business in Cyprus, or
- (VI) work in Cyprus, or
- (VII) are Directors of a Cypriot company until December 31 in the relevant tax year.
An individual who, is a tax resident , of Cyprus is taxed on his income from sources both within and outside Cyprus. An individual , who is not a tax resident of Cyprus is taxed on income received or arising only in Cyprus.
Individuals who are tax residents of Cyprus are taxed on their income as follows:
Taxable income, EURO
Tax rate %
19 501 - 28 000
28 001 - 36 300
36 301 - 60 000
Over 60 001
- A company that is a tax resident of Cyprus is taxed on income received or arising from sources in Cyprus and outside Cyprus.
- A company that is not a tax resident of Cyprus is taxed on income received or arising only from sources in Cyprus.
- Tax Resident (Company):
A company is a tax resident of Cyprus if it is managed and controlled from Cyprus.
- Corporate tax is a tax on the net profit of a Cyprus company at a rate of 12.5%.
- In addition, non-domiciled shareholders are not taxed on dividends.
CAPITAL GAINS TAX The capital gains tax rate is 20% on:
- profit from the sale of immovable property located in Cyprus;
- profits from the sale of shares in companies not listed on a recognized stock exchange that own real estate located in Cyprus;
- profits from the sale of shares of companies that indirectly own immovable property located in Cyprus and receive at least 50% of their market value from such immovable property.
It should be noted that due to the fact that a person who sells more than one property in a short period of time can be considered by the tax authorities as a trader and shall be taxed on the basis of income tax, not capital gains tax.
Value Added Tax is imposed on the supply of all goods and services in Cyprus, on the purchase of goods from other EU countries and on the importation of goods from third countries.
The standard rate is 19%.
The standard rate applies to deliveries of all goods and services in Cyprus that are not subject to zero rate, reduced rate or exempt.
Any registered person must submit a VAT return no later than the 10th day following the end of the month following the end of each VAT period and pay the VAT due / VAT refund.
All taxpayers must file their quarterly VAT returns through Taxisnet.
Application for VAT refund is made electronically by filling out the appropriate form through Taxisnet system.
Introduction of a reduced rate of 5% on purchase and/or construction of residences for usage as primary and permanent residence
- Since 8 June 2012, the reduced rate of 5% applies to the acquisition and/or construction of housing to be used by eligible persons (residents of the Republic and/or other EU or non-EU member states) as their primary and permanent residence only after receiving a certified confirmation from the commissioner.
- A reduced rate of 5% applies for the first 200 square meters of living area of the housing, which is determined by the floor space index.
In order to obtain a category F residence permit, the applicant must submit the following documents:
- Declaration of Secured Annual Income Abroad;
- Contract of sale or lease contract;
- Police clearance certificate, Birth Certificate and Marriage Certificate with translation and apostille.
The application review period is approximately 18 months.
To obtain a residence permit in category 6(2), the applicant must provide the following documents:
- Investment in a residential real property, which must be a first sale, worth at least 300,000 euros + VAT or an investment in a commercial real property worth at least 300,000 euros;
- Evidence proving that the applicant has an annual income of at least €30,000. The annual income is increased by €5,000 for each dependent family member and €8,000 for each dependent parent;
- The investor, spouse, adult children (18-25) and parents must provide police clearance certificate from the country of residence, with translation and apostille;
- Evidence proving that the money for the investment came from abroad.
The application review period is about 2 months.
To clarify the details – email@example.com or fill out the feedback form on the site, we will call you as soon as possible.